viacin said:
Why refine at all? Why not simply buy scrap from Point A and sell it to us refiners at Point B for your profit?
It all depends on one's objective, eh?
It may come as a surprise to readers, but I refined gold for more than nine years before I sold as much as a grain. My interest was not in making money, but in owning gold. I already had a good income and had enough money to cover my needs, which are small. I do not buy a new car because the neighbor does. I dictate the terms of my life, I do not allow his choices to influence mine.
When I started refining, it was illegal to do so without a federal license. Screw them, I said to myself. That sounds like way, way, way too much government control. I'll just figure this thing out on my own and refine, storing gold for my retirement.
By the time I started selling gold, I was well recognized as a gold refiner and had a strong following. All restrictions on processing and possessing gold were eliminated on Jan. 1, 1975, which allowed me to be vocal about my hobby-----a hobby that was virtually unheard of because of previous regulations. I was in the right place at the right time for a business to blossom, although that was never my intention.
Selling for spot was no big deal, a simple phone call to given customers and it was gone. The customer got a good deal because they bought for spot----which they, otherwise, were unable to do.
So then, the objective of each individual is what matters.
I have little patience with the guy that thinks he will stride into a situation, grab all the values and dump them in the lap of a refiner, making a killing in the process. These morons usually do little more than muddy the water for those that have good intentions. If any of the readers of this forum think they're going to skin a fat lamb by dealing in precious metals, they're in for the surprise of their lives. The precious metal market is exceedingly fickle. I sat watching the gold market for more than 20 years, with many of them with gold in the $300 arena. In those twenty years, I saw it run up to $500 and fall back, often well below the price of production.
You doubt my comment about a fickle market? How then would you account for the price of rhodium----which was over $10,000 not too long ago?
Bottom line? If you are interested in being a refiner, it is important to serve the needs of your primary customers. If they are people that deal with ingots, that's what you must provide. If you rely on a second or third party to provide them, your chance of survival is small---for you'll make little money, if any, and if you cheat the customer to insure profit you won't last long enough to make it worthwhile. One unhappy customer can do more damage to one's reputation than can be healed with hard effort and a prolonged period of time.
The choice is yours. Become a refiner, or find a different way to find entertainment. Or------simply stay the course and refine for your own pleasure, with no idea in mind of making profit. That way anything that comes from your activity can be looked upon as having made a dime.
An added thought; the idea of hitting garage sales, flea markets and all the other sources you can conjure is a waste of time. That's not to say you can't, and won't, find the odd bit of precious metal. You will, but you can't make it a living.
I snickered time and again as I talked with one of my customers, a prospector that had undying devotion. I accumulated more gold in two weeks than he did in a year, simply be refining for others for a percentage. There's nothing like going out looking for gold to put in focus the reason why it sells for the price it enjoys. It's damned hard to come by, be it via e scrap, where you put in a huge amount of labor, or by prospecting, which may
never pay dividends. You have to use wisdom to make this thing work----with the niche market Lou spoke of the biggest part of success.
Harold
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